NEW YORK -- After finally hitting their stride late last year, small-company stocks were supposed to blow past the rest of the pack this year. But a little past the halfway mark, they have slackened off.Depending on which measure is used, small stocks have either slightly outperformed or been no better than bigger stocks. The combination of a weak economy and impending health care reform have drained the stocks of their staying power, causing them to lurch around for much of the year."It seems like this is the third or fourth time where we've been wondering where the economy is going," said Henry Otto, the small-stock portfolio manager for Brandywine Asset Management Inc. in Wilmington, Del. "This hasn't helped them much at all."

T. Rowe Price closed two funds focused on smaller companies to new investors Thursday, a move the firm said was designed to protect the traditionally risky funds from their own success. The assets of the roughly $15.5 billion New Horizons Fund, which has investments in tech firms including Twitter, Netflix and Chinese video site Youku.com, have risen by almost $11 billion since 2002, according to the company. Returns rose 49 percent in 2013. The assets of the roughly $10.2 billion Small-Cap Stock Fund, which has investments in Jack in the Box and pharmaceutical company Incyte Corp.

By Floyd Norris and Floyd Norris,New York Times News Service | November 4, 1990

If the market for big stocks is depressed, then the market for small stocks seems almost lifeless.Signs of distress in the over-the-counter market include trading volume, which has fallen to its lowest level in almost two years, and prices, which have fallen relentlessly to the lowest levels in several years for many stocks. Prices are falling much more rapidly than among larger stocks.While the big NASDAQ stocks -- like Apple Computer, MCI Communications and Intel -- trade generally in line with the large stocks on the New York Stock Exchange, the smaller stocks, the ones that are not household names, have suffered the greatest carnage.

With small-company stocks coming off a rocky year and heading into economic uncertainty, confidence in a traditional January small-cap rally isn't strong. Investors tend to move up the market capitalization scale in times of stress to large companies, which are seen as carrying less risk than small firms. Big companies have a stronger financial foundation and typically aren't as dependent on credit markets to continue operation. That may blunt the likelihood that year-end stock selling will create a rush of bargain hunters to small-cap stocks at the beginning of 2008.

Think small and think financial services.Those were the winning tickets in stock mutual funds in 1992.Already, however, there's concern that it may have been too much of a good thing.Overall fund performance would have been lackluster had not small company growth funds exploded for a 16 percent gain in the fourth quarter and financial services funds risen 35 percent for the year.As a result, Americans who put a record $69 billion into stock funds in 1992 were rewarded with an average return of 8.9 percent.

NEW YORK -- Stocks closed mixed yesterday, as a slump in shares of Walt Disney Co. dragged blue-chip issues lower. But over-the-counter stocks continued to climb to new highs.Yesterday's performance, which ended a four-session rally that took broader market averages to successive highs, came in the face of more good news about the economy."We've been up for four days in a row, and it's time to take a rest," said Edward Collins, executive vice president of institutional trading at Daiwa Securities America.

The lows are low, but the highs are the very highest.That's not a description of the mental state of the latest wild-eyed rock 'n' roll group but rather of a volatile group of stocks that keeps investors' adrenalin pumping.Small-company growth stocks can skyrocket, as in 1991 when the Russell 2000 small-stock index rose 44 percent.They can impress, as in 1992 and 1993 when their respective 16 percent and 17 percent gains outstripped larger stocks.But they can disappoint, too, such as last year when they finished 3 percentage points behind the Standard & Poor's 500 index because rising interest rates hammered small firms.

The outlook for small-company stocks is lost between bemusement about Internet stocks and the run-up to the 10,000 mark of the Dow Jones industrial average.For many mutual fund investors, the small-stock story is important, however, because most fund managers buy stocks that aren't in the Dow or the Internet bubble.It's hard to justify paying a professional manager to pick among the biggest stocks when information about them is so widely available, or to roll the dice on Internet stocks when you can do that yourself just as effectively.

By Jonathan Lansner and Jonathan Lansner,Orange County Register | May 10, 1992

Where have all the small stocks gone?Small-company stocks long have been the favorite of small investors. The lure of finding the next Apple Computer or MCI before the Wall Street pros latch on to it is tempting.But investors seeking to use lesser-known companies as the road to wealth today will find fewer and fewer traditional "small cap" stocks, as traders call them.A rally in companies with more modest market capitalization -- that is, share price multiplied by number of shares, or the value of all stock outstanding -- has turned many small caps into bigger fry or made them expensive by various market measures.

NEW YORK -- U.S. stocks advanced to records across a broad spectrum for a second day, as investors poured cash into shares of paper makers, small companies and other businesses that have lagged behind the market.The Dow Jones industrial average rose 32.63 to 8,675.75, its second straight record. International Paper Co., up $1.4375 to $51.875, was its biggest gainer.The Standard & Poor's 500 index rose 4.22 to a record 1,068.47. The Nasdaq composite index rose 8.34 to 1,756.85, still below its record close of 1,777.

For two years, market watchers have been nagging investors to be careful about overdosing on small-company stocks, and to stop shunning large companies. But those who listened regretted it, as the smaller stocks continued to outperform - until recently. Now, small caps are lagging, and some experts say it could get much worse. As fear took hold of investors recently amid signs of a potential credit crunch and worsening housing recession, investors turned away from the most fragile companies, and small-cap mutual funds became fund investors' biggest losers.

The asset class of the moment is large-company growth stocks. Two big fund firms recently sent shareholder newsletters touting the coming surge in big stocks and a third issued its top 10 reasons investors should "make an allocation to large-cap growth stocks now." Seemingly every investment talking head on television and a legion of radio yakkers are positively ga-ga over the large-cap boom they see on the horizon. There's some logic behind the hype. Valuations on large-cap growth stocks haven't looked this good in years, the big companies stand to benefit more than others from the falling dollar and the cycle that has that has boosted small- and midcap stocks has reached a point where historically it should be ending.

With investors pouring money back into the stock market, T. Rowe Price Group Inc. has closed two more of its most popular mutual funds to new investors in order to protect returns for existing shareholders. The moves come as regulators and industry critics have scolded some mutual fund firms for not closing popular funds as they become too large for managers to operate efficiently. Firms are often loath to cut the flow of money into funds they have spent thousands of dollars to market.

THANK goodness for the investment lessons of the 1990s. We may be dreamers, but we're not dumb. Once a generation, the stock market delivers a painful, indelible reprimand about the dangers of speculation and the importance of business fundamentals. We learn that profits, dividends and diversification matter. We learn that advice-wielding brothers-in-law aren't Warren Buffett. We learn that the promise of technology stocks is not the same as the promise of technology. We learn to be skeptical of little companies such as, say, Aether Systems Inc. of Owings Mills, which has never made money and whose business of mobile computer applications is extremely competitive.

By Christopher Davis and Christopher Davis,MORNINGSTAR.COM | September 14, 2003

By and large, small-cap stocks aren't household names. But there are exceptions. Home decorators, party planners and cooks (not to mention followers of the criminal justice system) are no doubt familiar with small-cap Martha Stewart Living Omnimedia. But few small-caps get anywhere near as much analyst coverage or ink. With fewer analysts and investors closely following smaller companies, the odds are better that you'll find stocks whose virtues aren't appreciated by Wall Street in small-cap land than in large-cap territory.

If you are certain that the stock market is not to be trusted, with its accounting scandals and its everyday risks, then pull out before the next crash. If the Social Security system will fail soon and if inflation will reignite, if interest rates are set to skyrocket and upset everything, if higher gasoline prices persist, then stash that cash. But, if you need a break from Enron and Andersen and the rest of today's economic fears, then read on. Because a few minutes with Peter Lynch, probably one of the best stock-pickers of our time, will help you rediscover the classic case for owning stocks.

What does it take for a small company to get Wall Street's attention?Strong earnings and a cheap stock don't seem to be enough. The billions of dollars floating around the stock market are picking large-company stocks like never before.But maybe you haven't noticed that small stocks have been in something of a bear market since 1994. It's not that their prices have fallen. It's that their prices haven't risen even half as much as prices of big stocks.Returns on big stocks were so much higher last year -- more than 25 percentage points higher -- that the chasm became extreme.

NEW YORK -- As blue-chip stocks continue to lurch through a disappointing year, small-company stocks are jetting upward, thanks to confidence in the economy and worries about overseas economies.Two indexes that trace small stocks closed yesterday near all-time highs, with the NASDAQ Composite up 4.04 points, to 642.61, just a hair off its record of 644.92, set in February, and the Russell 2000, which follows generally smaller companies, up 1.09 points, to 209.77, also near its record high of 212.61, set in February.

By Bill Barnhart and Bill Barnhart,SPECIAL TO THE SUN | April 21, 2002

A stealth bull market in small and midsize stocks, amid persistent troubles in big-name technology and telecommunications stocks, has been the silver lining to this year's uninspiring stock market. Consistently in recent days, the number of stocks hitting new 52-week highs topped more than 200 on the New York Stock Exchange and Nasdaq stock market. On the other hand, a mere handful of stocks are reaching 52-week lows. Yet the daily volume of trading in advancing stocks vs. trading volume in declining stocks indicates strong selling pressure in both markets.

Small-cap blend funds have offered a few rays of sunlight in a very cloudy market. Even with the flight to safer large caps after the Sept. 11 tragedy, small-cap stocks continue to be the equity market's best performers this year so far. And small-blend funds, which provide core exposure to the small-cap universe, have held up relatively well. For the year to date through Oct. 22, the average small-blend offering has lost "only" 5.7 percent, which is 11 percentage points less than the S&P 500 index.